The Bundesbank’s Jens Weidmann unleashed a litany of cticisim on the Eurosystem (read the ECB) when he said that Greek banks should not continue to buy the short-term debt of their government, which is then repoed back to the ECB in exchange for precious cash. “The Eurosystem must not provide bridge financing to Greece even in anticipation of later disbursements,” said Weidmann, who also sits on the European Central Bank’s Governing Council, which approves such funding to Greece. “When banks without access to the markets buy debt of a sovereign which is likewise locked out of the market, taking recourse to ELA raises serious monetary financing concerns,” he said in a speech to be delivered at a conference in Frankfurt.

If anyone thought the bad blood between Germany and the rest of the insolvent proletariat, aka the part of the Eurozone which is out of money (most of it), and which has been now confirmed will be supporting Obama (one wonders what the quid for that particular quo is, although we are certain we will find out as soon as December), complete collapse of the Greek neo-vassal state of the globalist agenda notwithstanding, had gone away, here comes former ECB chief economist Juergen Stark to dispel such illusions. In an interview with Austrian Die Presse, the former banker said what everyone without a PhD understands quite well: “The break came in 2010. Until then everything went well…”Then the ECB began to take on a new role, to fall into panic…. Together with other central banks, the ECB is flooding the market, posing the question not only about how the ECB will get its money back, but also how the excess liquidity created can be absorbed globally. “It can’t be solved by pressing a button. If the global economy stabilises, the potential for inflation has grown enormously… It gave in to outside pressure … pressure from outside Europe” Why, whichever bank headquartered at 200 West, NY, NY might he be referring to?

He added that “panic” about the eurozone breaking up was “nonsense” but that the only way to end the crisis was for member states to bring down their debts and implement structural reforms to boost economic growth.

“Governments have recognised that returning to budgetary discipline is indispensable. Markets focus much more on whether states will be able to service their debts in five years’ time,” he said.

Mr Stark quit in late 2011, following in the footsteps of former Bundesbank head Axel Weber, who stepped down earlier in the year from Germany’s central bank because of unease about the ECB’s policies.

Mr Weber’s successor Jens Weidmann was the only member of the ECB’s policy-setting governing council to vote against the bank’s new programme earlier this month.

“Weidmann’s arguments … should not be made light of,” Mr Stark told Die Presse. “The way in which his position has been publicly commented upon by the ECB leadership has crossed the line of fairness.”

And speaking of continuing takeover of the world by a few not so good banks, a loud warning that the advent of globalist influences (i.e., bankers) is taking over Europe and that the “destruction of Europe’s democracy is in its final phase” comes not from some European (or American… or Zimbabwean) fringe blog, but from the 71 year old president of the Czech Republic, someone who certainly knows about the difference between communism and democracy, Vaclav Klaus. In an interview with The Sunday Telegraph, “Václav Klaus warns that “two-faced” politicians, including the Conservatives, have opened the door to an EU superstate by giving up on democracy, in a flight from accountability and responsibility to their voters. “We need to think about how to restore our statehood and our sovereignty. That is impossible in a federation. The EU should move in an opposite direction,” he said.”

Ongoing grand plans to flood the economy market with money have reminded Bundesbank’s Jens Weidmann of the scene in the play Faust – when the devil (Mephistopheles) ‘disguised as a fool’, convinces an emperor to issue large amounts of paper money – which solves the kingdom’s financial problems in the short-term but ends rather badly in rampant inflation.

As The Telegraph notes, without specifically mentioning Mario Draghi’s bond-buying programme, he said: “If a central bank can potentially create unlimited money from nothing, how can it ensure that money is sufficiently scarce to retain its value?” He added: “Yes, this temptation certainly exists, and many in monetary history have succumbed to it,” Mr Weidmann warned.

Although the remarks were in context – Frankfurt is currently marking the 180th anniversary of the death of Goethe – they defy calls by leaders for Mr Weidmann to tone down his criticism of the ECB, particularly at a febrile moment in the crisis. Continue reading »

FRANKFURT (MNI) – The following is a statement issued by the Bundesbank on Thursday:

“In the most recent discussions, as before, Bundesbank President Jens Weidmann reiterated his frequently substantiated critical stance towards the purchase of government bonds by the Eurosystem.

He regards such purchases as being tantamount to financing governments by printing banknotes. Monetary policy risks being subjugated to fiscal policy. The intervention purchases must not be permitted to jeopardise the capability of monetary policy to safeguard price stability in the euro area.

If the adopted bond-purchasing programme leads to member states postponing the necessary reforms, this will further undermine confidence in the political leaders’ crisis-resolution capability. This underscores the crucial importance of ensuring both credibility in the promised conditionality and the resolute determination to immediately terminate intervention purchases if the underlying conditionality is no longer assured.

The announced interventions in the government bond market carry the additional danger that the central bank may ultimately redistribute considerable risks among various countries’ taxpayers. Such risk-sharing, however, can be legitimately authorised solely by democratically elected parliaments and governments.”

ECB (and Federal Reserve) banksters are totally in love with the weapon of last resort, the so-called ‘Nuclear Option’ or ‘Quantitative Easing’ (QE).

“By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.” – John Maynard Keynes

And now the irresponsible deficit spending and (unlimited) bankster bailouts can go on and on. Who will benefit and who will lose?

“When a country embarks on deficit financing and inflationism you wipe out the middle class and wealth is transferred from the middle class and the poor to the rich.”– Ron Paul

“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. … This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.”– Alan Greenspan

And the ECB’s ‘Hyper Mario’ will have to monetize TRILLIONS in bad debt!!!

Weimar (hyperinflation) all over again?

In less than one year the Eurozone will be much worse off than before.

ECB President Draghi breaks with brazen principles of German monetary policy. The central bank is pumping unlimited money in the bond markets. Stock markets cheer – for Germany begins the nightmare

As it was, the word that everyone had been waiting indefinitely. Which it was used, Mario Draghi, President of the European Central Bank (ECB). Unlimited wants the ECB to buy in the future decision of the Central Council of Euro-bonds with countries to stabilize the ailing financial markets in the monetary union.

…

Polleit holding gold for the investment of the hour, because unlike central bank liquidity, do not let any physical precious metals increase.

Earlier today we showed for the nth time that with insanity and insolvency ravaging the old continent, at least one person has the temerity to avoid sticking his head in the sand of collectivist stupidity and denial. That person is Bundesbank head Jens Weidmann, who until now may or may not have had the backing of Germany’s elected leader, Angela Merkel. Moments ago it became clear whose side Merkel, who recently came back from vacation and is set to spoil the party that the (insolvent) mice put together in her absence, is on. From Reuters, who quotes Merkel in her just released interview with German ARD: “I think it is good that Jens Weidmann warns the politicians again and again,” Merkel said. “I support Jens Weidmann, and believe it is a good thing that he, as the head of the German Bundesbank, has much influence in the ECB.”

Merkel also has some additional words about the Grexit.

Merkel allies, particularly the Bavarian Christian Social Union (CSU), have stepped up criticism of Greece in recent weeks, with senior CSU lawmaker Alexander Dobrindt saying at the weekend that he expected Athens to be out of the euro zone next year.

It is one thing for various anti-Central Planning (and thus central bank) outlets to warn, over 3 years ago, that easy monetary policy is merely an enabling substance, and is addictive as any drug to a dysfunctional political establishment which is more than happy to avoid fiscal prudence if monetary policy is readily available to delay the inevitable day of reckoning when monetizing the debt will no longer work. It is a different matter entirely when the head of the world’s only solvent central bank – the German Bundesbank, which happens to be the biggest guarantor of that other mega hedge funds the ECB, and which of all developed economies also happens to have had the closest recent encounter with hyperinflation (unlike all the “other” theoretical experts who enjoy talking extensively about matters they have zero experience with). In an interview with German Spiegel magazine, Buba head Jens Weidmann, once again has loudly warned what as recently as 2009 very few dared to even think: namely that rampant and gratuitous deficit plugging using central bank debt issuance, and thus explicitly monetizing the debt, “can be addictive as a drug.” Obviously, like any drug overdose, the aftereffects are always fatal.

Bundesbank President Jens Weidmann has strongly criticized of the plans of the European Central Bank to launch a new program to purchase government bonds. “Such a policy is for me too reminiscent of public funding via printing,” Weidmann warns in an interview with SPIEGEL. “In democracies it is parliaments that should decide on such an extensive pooling of risks, and not central banks.”

If you buy the Euro-banks government bonds of individual countries, “the papers end up in the balance sheet of the Eurosystem,” Weidmann warns: “Ultimately, the taxpayers of all other countries pay.” The basic problems are not solved in this way, the Bundesbank president – on the contrary: “The blessing of the central banks would raise persistent monetization demands,” said Weidmann in SPIEGEL. “We should not underestimate the risk that central bank financing can be addictive like a drug.”